Seeing David Cameron in person: an afternoon at the Treasury (Simplifying procurement)

Last Friday, I attended a meeting at the Treasury about SME procurement. It was fascinating, memorable and useful, not least because I got to see David Cameron, our Prime Minister, in person for the first time. 

This was the (first?) “SME Strategic Supplier Summit” and it was hosted by Francis Maude who is Minister for the Cabinet Office. The aim of the afternoon debate (which included about 100 representatives of small and medium sized suppliers to the government bodies, as well as press and senior members of the civil service) was to: 

• Cover what the Government is currently doing to progress SME-friendly procurement practices;
• Report back on comments received from the SME feedback facility hosted on the No10 Downing Street website;
• Seek our views on what reforms and actions the Government should be prioritising to make the marketplace more attractive to SMEs

Seated in cabaret style, the meeting began with the PM and Francis Maude entering to open up the debate and make some initial speeches. Baroness Eaton, the LGA Chairman also gave a presentation. A number of key initiatives were announced (see here, here, here and here for Government and press reports of them). Also attached is the document we were given to help seed the debate. 

The essential message from all the presentations is that the Government is thoroughly committed to making Government procurement more ‘SME friendly’. Their ambition is that around 25% of all government contracts will be with SME suppliers (although one person later questioned whether this was as a % of contracts or a % of value). 

People who read my blog will know, I have some strong opinions about procurement! (My humorous rant against the excesses of procurement, my suggestion for what makes an excellent procurement function and the need for more commercial leadership can all be accessed from those hot links.) And so, it was a real pleasure to hear about the Government’s plans to make procurement less onerous and more effective. Moreover, it was great to hear that I am not alone in my views! I was also very impressed that the Minister stayed for the whole afternoon, engaging in the table debates that occurred.

Some selected comments from Francis Maude: 

• “We will make it easier for SMEs to do business with government: that is an absolute commitment” 
• “Hold our feet to the fire to make sure we follow through on this” 
• “Demands for public services are as great if not greater than ever” 
• “This is the end of the era of big state, this is now the era of the Big Society” 

And very interestingly

• “We are not friends of the idea of framework contracts”

I am watching this space with interest and I have already subscribed to the new and free one stop shop for Government procurement (Contracts Finder). I would recommend all suppliers and buyers do likewise. I am happy to report that SMEs were involved in the development of this new service (we were told this at the event in answer to my question). 

So what now? Naturally, I am a little sceptical, although I do not doubt the verve and commitment of David Cameron and Francis Maude. I am sceptical because I have seen much of this before with the Glover report which seems to have only had marginal impact. (As a small example, I am still sometimes asked to provide paper copies of tenders when this report specifically recommended doing away with this.) 

I am also cautious in my optimism because I think there are a number of very big dilemmas the Government has to handle in driving forward on this strategy. They will need to find a way to balance: 

• The economies of scale with the desire for localism (what might be called the “Sir Philip Green factor”)
• The desire by central government to control and direct with the desire to develop bottom up solutions from SMEs and third sector suppliers
• Big business interests (who currently hold many of the cards with some very large contracts) with the small business aspirations of SMEs who want to slice the marketplace in smaller chunks
• The interests of big third sector suppliers (such as NACRO and Age UK) with small local consortia of SMEs, small charitable bodies and the whole Big Society
• Procurement professionalism with procurement centralism (and what I perceive sometimes as their ‘control freakery’)
• Single client/customer focus with a multiple stakeholder ‘whole chain procurement’ approach (see below)
• Transparency with commercial confidentiality
• Supporting and developing progressive commercial practices (such as encouraging women owned business or ones that have visionary aspirations for health and safety) with making procurement too ‘politically correct’ and insufficiently concerned with bottom line VFM for the public purse
• Suspicion with openness, (or how not to see all commercial suppliers as smooth tongued snake oil sales people and more as partners with whom to collaborate openly, even when some commercial suppliers are...)
• The prevalent idea of submitting one final bid with the (often common in the commercial world) practice of negotiation over a number of iterative conversations
• Fixed and concrete specifications with ones that recognise complexity and change such that service contracts need to allow for emergent solutions rather than ones fixed in aspic
• Due probity and essential risk management with bureaucratic and unwieldy demands
• Methods to provide assurance against corruption with the institutionalising of risk averse and Byzantine processes (I noted that David Cameron mentioned the ‘nobody got fired for buying an IBM’ factor in procurement...)

I could go on (and already this blog post is probably far too long: so thanks for reading to here!) but I will end on one thought. And this picks up on a constant theme of my blog – the need to take a whole system perspective. One point I made at the event, which Francis Maude said was a good one, was the need to involve the end user in the procurement process. I used the example of a soldier sitting for the first time in a newly procured and sparkly tank: the soldier knows immediately that it will not work as well as it should and could have done.

• How many soldiers (and, of course, many other frontline public service officers) are still never involved with a procurement process?
• How many of their insights and ideas could contribute ££ millions in savings and other improvements if they were given the opportunity?
• And indeed, how much more could be achieved if the people who will be receiving the service (the citizens, clients and customers of public services) were also given the chance to offer their ideas?

What we need is (to coin a phrase) “whole chain procurement” that brings people together to co-design and thence procure the services we all need to create a civil society: one that is creative, ambitious and fair!

Achieving excellent procurement (Update)

How do you know if your procurement / purchasing function is doing a better job than (say) this time last year – how do you measure success? How do you know if the service is VFM? 

I ask the question because:

• most procurement processes frustrate me to bits – in recent days, I have even had a friend in the same business tell me that she is losing the will to live after having written x bids over recent weeks. (You may have already read my – hopefully humorous – rant about the excesses of procurement in my field  - click here if you haven’t)
• I have been offered a complementary place at a forthcoming conference on public sector procurement (see here) for which I am most grateful. The least I thought I could do was do some further thinking about the subject – hence this blog post
• the influence, scope and size of procurement in the public services is set to grow even further – especially of Sir Philip Green has his way (see here for the main story). Government services must practice excellent: efficient, effective & economic procurement as a consequence.
• it isn’t just suppliers who lose sleep and hair over procurement so do the clients want to source a particular service. I know of several instances of where a client wants Z but because of the procurement process enforced upon them, they get Y. And from the work I did years ago supporting a firm which developed systems for the Ministry of Defence – I know that the end user (be it frontline member of the armed forces in that case or a citizen / customer in many other cases) just does not get a look in, usually.

So what is to be done? I offer this checklist below as my ‘starter for ten’ attempt at what I would expect to see evidence of in an excellent procurement function. Please feel free to add more points or make the case to tweak or even delete some of my suggestions. I have written this without any reference to any published standards (of which their might be legion!) 

For me, an ideal procurement function would: 

1. Have systems in place to understand and respond to trends in client satisfaction with its services
2. Have established a productive way of listening to feedback from suppliers / bidders (successful and unsuccessful) involved in the procurement processes they manage
3. Benchmark their processes with other procurement functions, both inside and outside their industry or sector, to look for ways to improve what they do
4. Collect the information and be transparent about all the resources spent on procurement processes: by the function themselves, the client who wishes to source a supplier and (radical idea perhaps) all the bidders. (It is a standard clause that clients do not pay for the effort that goes into writing bids. Fair enough. But that resource has to be paid for some how.) This overall data would also be a crude measure of how ‘elegant’ a procurement process is.
5. Have developed an easy to grasp method for measuring whether the cost benefit analysis of the procurement processes are improving or worsening.
6. Have practices in place to ensure that the ‘voice of the customer’ – the end user, citizen or frontline person who will be the final recipient of the new service / product being sourced – is evident at every stage of the procurement process and is heard loudly & clearly.
7. Make efforts to connect people together across the supply chain so that the procurement function does not attain disproportionate power by being the sole knowledge holder and (more crucially) that procurement is done ‘whole system aware’ (see here for further information about this).
8. Although it is harder, always look for ways to procure on outcomes or overall objectives rather than outputs or processes. (All too often, I see tender documents that specify what I know to be a less than satisfactory ‘going through the motion’ type process which will be lucky to achieve any lasting outcomes. Magic can happen if suppliers are given the scope to propose a process that may be outside the prescribed ‘usual’ way of doing things but which will still achieve the desired for outcomes.)
9. Run procurement processes in ways that inspire potential suppliers to be innovative and think of ways to achieve the desired outcomes with more efficiency and effectiveness.
10. Have accrediting procedures which do not involve the uploading of numerous policies and strategies but merely state that the winning bidder will be expected (then) to show that they have these in place.
11. Have established shrewd ways of sorting the bidders into ‘wheat and chaff’ involving (perhaps radically) asking the bidders to state what questions or measures they would pose to the other bidders to help achieve this result.
12. Led strategically, mindful of the key purpose of procurement within the overall strategy of the host organisation.  

I probably could go on!  

But what do you think? Do you agree with the points above? Would you add any more? Would you subtract some of the points above?

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Just spotted this interesting and related article: 

http://www.supplymanagement.com/news/2009/nao-slams-government-purchasing-capability/

9 November 2009 | Jake Kanter

"Significant weaknesses" in procurement skills are jeopardising value for money on major projects, according to the UK's National Audit Office (NAO).

The spending watchdog's latest report, Commercial skills for complex government projects, said the public sector lacked commercial capability in areas including contract management, commissioning and risk management....

Radical Efficiency: Different, better, lower cost public services

Went to a fabulous session this morning which launched a new report from NESTA about 'radical efficiency' and how to make it work. The point was well made that delivering public services in a radically different way is no longer just very important or even critical - it is an imperative! Here is a link to their excellent report:

http://www.nesta.org.uk/home/assets/features/radical_efficiency

The launch had some excellent presentations and questions - which prompted lots of ideas in my head about how to make effective and efficient innovation happen. I will write more later - but here is quick summary which I have already tweeted (of course!):

• Use the common wealth to create more common wealth...
• Look for ways to connect consumers together to create new expertise resources
• Stop blaming central govt and just get on with taking radical action locally
• Break accountability 'rules' and give authority to the point of service delivery
• Lead so that you enable risk taking, not to close it down
• Get everyone in one room so that professionals can 'hear' the voices of consumers directly!
• Think of doing more with more (not less) - but redefine what you count as your resources
• Create a culture where structure & passion coexist sublimely to achieve real results

My huge thanks to everyone involved with the report and indeed present at this morning's event. (I wish we'd had the whole day to debate the issues emerging... perhaps NESTA would like to organise such a day....?)

Original blog post: http://tinyurl.com/radefficiency